Economic Forecast 2015 FINAL · 2016. 6. 3. · 4 2015 ECONOMIC FORECAST MAPS 3, a 10-year, $777 million construction program funding eight community projects, has experienced incredible

2015

GREATER OKLAHOMA CITY ECONOMIC FORECAST

OKLAHOMA CITY METRO

Prepared by

Russell Evans

Executive Director, Economist

Steven C. Agee Economic Research

and Policy Institue

Oklahoma City University

Eric Long

Research Economist

Economic Development Division

Greater Oklahoma City Chamber

[email protected]

405.297.8976

Greater Oklahoma City Chamber · 123 Park Ave. Oklahoma City, OK 73102 · 405.297.8900www.okcchamber.com · www.greateroklahomacity.com

TABLE OF CONTENTS

Overview & Executive Summary ............................................................... 1

National Economic Conditions and Outlook ...................................... 7

Oklahoma Economic Trends and Outlook ..........................................11

Oklahoma City MSA Economic Outlook ............................................ 20

OKC MSA Nonfarm Employment and Unemployment Rate ..........................................................................22

OKC MSA Mining Employment ...............................................................23

OKC MSA Leading Growth Sectors .......................................................24

OKC MSA Health Services ........................................................................24

OKC MSA Construction .............................................................................26

OKC MSA Leisure Services .......................................................................26

Appendix A: U.S. Outlook Table .............................................................27

Appendix B: Statewide Employment and Earnings History and Forecast .......................................................28

Appendix C: OKC MSA Employment and Earnings History and Forecast ..................................................... 30

12015 ECONOMIC FORECAST

OVERVIEW The Greater Oklahoma City Economic Forecast provides a comprehensive analysis of the national, state and metro economies. It details historic trend analysis and a snapshot of the current situation, as well as a forecast for 2015.

Following a strong 2014, Greater Oklahoma City looks to economic diversity to help the region as it faces oil price uncertainties

Oklahoma City faces a contradiction of forces in 2015: Oil price uncertainty and its drag upon the energy sector versus long-run patterns of economic geography and diversity that have encouraged growth. The decline of oil prices in late 2014 and early 2015 has caused downward revisions from earlier forecasts for Oklahoma City and the state. Oklahoma is a Tier 1 energy state and will naturally receive an economic shock from oil price fluctuations. However, over the past several years Oklahoma City has also shown economic stability and diversification of its economy as well. Currently, the energy sector accounts for approximately 3 percent of the Oklahoma City metro’s total employment, but 9 percent of total earnings. The Oil and gas industry is expected to undergo a restructuring in operational and financial

activities that will involve some layoffs and downsizing. But the economic impact should be more about capital spending than the longer term employment fluctuations experienced by the region in the early 1980s. The industry has become nimble in its ability to adapt to changing conditions. It is expected that these actions will disproportionately impact smaller non-metro counties that have benefited from expanded drilling activities.

As one evaluates the broader economic picture, it is important to recognize the successes of the past year and how they can point toward future conditions.

Recruitment and expansion of businesses reaches five-year high

2014 brought about the fourth year of a five-year economic development program called Forward Oklahoma City IV. As part of that program, overall Chamber metrics are tracked for Chamber-assisted companies in five specific areas: job growth, wages, capital investment, tax base and product innovation. In 2014, Chamber-assisted companies announced the creation of 6,582 jobs with an average salary of $59,692. In addition, they announced more than $540 million in capital investment. These are the strongest results in the past five years. It is also the second consecutive year with more than 6,500 announced jobs and more than $500 million capital investment. These positive results are consistent with what was seen in the Oklahoma City market as a whole. A stronger national economy provided an environment more conducive to companies committing to and announcing long term investment projects. The Greater Oklahoma City region benefited from these improved national conditions.

2 2015 ECONOMIC FORECAST

Chamber-assisted job announcements were made across 15 different industry sectors. More than 70 percent of the announced jobs were in industries outside of the oil and gas sector. This speaks to the growing diversification of the Oklahoma City economy. The energy industry still plays a very prominent role, but there continues to be growth opportunities in Oklahoma City from companies not directly tied to that sector. There are some industries that will benefit from lower oil prices and potentially expand operations. However, we recognize that oil price declines will have an overall net negative impact on the region and state.

Major job or capital investment announcements were made throughout the year. A few notable 2014 announcements in the region include: The Boeing Company (relocating 900 engineering and support positions from Washington state), Tapstone Energy (adding 150 positions and investing $10 million in its headquarters), Farmers Insurance Group (adding positions to expand its data center/customer support capacity), Baker Hughes (adding 475 jobs and opening a new motor manufacturing center), Sutherland Global (financial services company opening a new corporate services operation with 150 positions) and American Energy Partners (adding 600 employees to its headquarters).

In 2015, Oklahoma City will see the official opening of the GE Global Research Center in Oklahoma City (announced in April 2013). It will be the company’s first-ever research facility dedicated to oil and gas technologies. The new center will create

130 high-tech jobs and is expected to have a direct and indirect impact of $13 million on the state and local economies. It is anticipated to attract international

attention from oil and gas partners around the world. Research from this facility will help reduce costs and expand opportunities for oil and gas companies throughout the world.

Tinker Air Force Base, the largest single site

employer in Oklahoma, plans to expand its aerospace complex in Oklahoma City. The expanded complex will take on maintenance of the KC-46A airplane, the replacement for the KC-135. The center will be built on 156 acres previously occupied by BNSF Railway. The project will require 14 new hangars to be built and will add about 1,300 jobs. The expansion is tentatively scheduled for completion by 2018.

In the near future, Boeing will be adding to the 1,800 employees already located in the region. Boeing plans to relocate 900 defense-related jobs from Washington state to its facility near Tinker Air Force Base. The September 2014 announcement is the company’s third time to move jobs to Oklahoma City, with employees previously coming from Long Beach, Calif., and Wichita, Kan. This most recent announcement consolidates Boeing’s defense operations and will add design, development and program management work tied to the Airborne Surveillance, Command and Control business unit.

OGE Energy Corp. has begun construction on its new headquarters location in downtown Oklahoma City. Within the same


block, there are also plans for additional towers that will bring more residential units and office space opportunities.

During 2014, two major retailers headquartered in Oklahoma City expanded their operations. Hobby Lobby continued the expansion of its Oklahoma City distribution and corporate headquarters. The firm now occupies 6.6 million square feet, doubling the size it had nine years ago. Hobby Lobby is the largest industrial property owner in Oklahoma City. Mathis Brothers Furniture built a new $16 million, 365,000-square-foot distribution center along Interstate 40 to keep pace with the growth of several brands it operates in the Oklahoma City metro.

The retail sector continues to be a bright spot for Oklahoma City area communities. Total taxable retail sales increased by 6.4 percent over prior year for the metro. Several notable “destination retailers” - including Cabela’s, TopGolf, West Elm, Children’s Learning Adventure and Von Maur - have recently chosen to locate in Oklahoma City. Two significant development projects adding to the retail landscape include Chisholm Creek, a 180-acre mixed-use development in northwest Oklahoma City/Edmond and the Market at Czech Village - a $50 million retail center

planned for Interstate 40 and Czech Hall Road (far west Oklahoma City/Yukon).Economic activity also can be seen by an increase in passenger traffic through Will Rogers World Airport. According to year-end numbers, more than 3.8 million passengers flew in and out of Oklahoma City’s commercial airport in 2014. This is the largest number of passengers in the history of the airport, surpassing the previous record by nearly 100,000 passengers. The airport services 21 nonstop airports with an average of 75 daily departures.

Continued Progress on MAPS 3 Projects

Greater Oklahoma City has benefited from having five of the top 10 fastest-growing counties in the state in terms of population, and its population growth rate is double that of the nation. The Oklahoma City metro continues to attract residents who value a low cost of living and job opportunities. An important component to attracting and retaining a quality workforce is tied to amenities and quality of life. Nationally, the city is recognized for its Metropolitan Area Projects (MAPS) that specifically addresses these quality-of-life issues.

The Chisholm Creek development will bring new-to-market retailers, including Cabela’s and TopGolf.

Construction on the upper section of the MAPS 3 park is set to begin in late 2015.


MAPS 3, a 10-year, $777 million construction program funding eight community projects, has experienced incredible progress in the past year. The projects are funded on a pay-as-you-go basis through a seven-year, one-cent sales tax. Funds for projects are accumulated over time and construction cannot begin until all of the funds are available. This enables the city to avoid the cost of using debt to finance projects. The program continues to be on schedule. Current timelines for select projects are as follows:

• 70-acre downtown public park (first phase of construction complete in spring 2016)

• Modern streetcar/transit (first phase of construction complete in 2017)

• Senior health and wellness centers (first wellness center to be open in mid-2016)

• Oklahoma River improvements (whitewater rafting and kayak center to be completed early 2016)

• Oklahoma State Fairgrounds improvements (Expo Center construction completed end of 2015)

• Convention Center (construction completed near end of 2018)

MAPS 3 will be the culmination of more than a decade of development, implementation and construction. These projects will help to shape the quality of life for Oklahoma City residents and visitors for years to come.

The following economic forecast is based upon historic growth models and does not necessarily take into account unanticipated growth from relocations or “new-to-market” firms. In addition, announced expansions of existing companies may take place over a multiyear timeframe and not be fully recognized in the next year. Announced projects that have not taken place are not reflected in forecasted job numbers.

The City Council approved a streetcar route framework and aquired the Santa Fe railroad station for use as an intermodal facility.

Construction of the MAPS 3 whitewater park is underway, with completion set for early 2016.


After a slow start to 2014, the U.S. economy rebounded to finish the year strongly, posting growth rates in gross domestic product of 4.6 percent and 5.0 percent in the second and third quarter. Growth continued to post better-than-average gains in the fourth quarter, leading the chief economist of the World Bank to comment that “the U.S. economy was the single engine powering the global economy.” Growth is expected to carry into 2015 with the U.S. economy posting solid nonfarm payroll employment gains as unemployment rates continue to decline through the year.

The Federal Reserve has indicated some inclination to taking the first step towards normalization of monetary policy by raising short term interest rates off their zero lower bound in the middle of the year. A slowing global economy is driving a flight to the safety of U.S. Treasuries, keeping long-term interest rates down even after the Fed concluded a final round of quantitative easing. Global conditions will likely keep both short and long-term interest rates in check through 2015, possibly even extending the period through which the Federal Reserve maintains its zero interest rate policy.

A U.S. oil and gas renaissance has led to production levels not seen in 40 years with the U.S. currently producing in excess of 9 million barrels per day, making it the world’s No. 2 oil producer just behind Saudi Arabia and just ahead of Russia. The oil and gas industry has led the post-recession economic recovery and puts the nation where Oklahoma has long stood – striving

to find a balance between the benefits to consumers from falling oil prices and the costs to the economy from industry slowdowns. OPEC leaders have successfully talked the market down to nearly $45 per barrel with recent comments suggesting prices fell further than they had intended or thought necessary to discourage the pace of production and remove some production from the market. OPEC leaders and individual oil ministers have recently called a bottom in the oil market, trying to talk the market back up to prices they see as consistent with moderating the pace of development in the U.S. and other foreign markets. The consensus (such that there exists a consensus view on oil prices) seems to be that prices should increase through 2015 before settling in a range of $65 to $85 by the end of 2015 and hold that range through 2016. Our state and local forecast is predicated on this price path coming to pass.

Economic conditions in Oklahoma improved in 2014 after a relatively lackluster 2013. Statewide private sector employment grew at a 2.4 percent pace in 2014, for a 2011 to 2014 post-recession average growth rate of 2.2 percent. Payroll employment growth was more than enough to offset strong population gains and keep downward pressure on the state’s unemployment rate which averaged only 4.6 percent for the year.

An oil price fall as far and as fast as the market experienced over the last seven months is unambiguously bad for the state’s economy. How bad remains to be

EXECUTIVE SUMMARY


seen. Residents, business leaders and policymakers who have lived through significant periods of the state’s economic history have come to expect busts to follow booms as surely as thunder follows lightning. Busts, however, have as much to do with expectations as current conditions. The state’s most famous bust of 1982, accelerated by Saudi Arabia’s production in 1986, lasted nearly 15 years by most economic metrics. The severity of the bust rested on the expectations developed around Saudi policy that oil prices would not only be driven low but would stay low for a considerable time. The bust of 2008 was much shorter-lived, but just as steep as active oil rigs in the state fell from more than 210 to 75 in just one year. Again, the rapid adjustment of producer behavior was the product of uncertain expectations that the world could be heading towards a long-lived global recession suppressing future demand for energy. Once concerns of the worst subsided and expectations adjusted to the new economic reality, rig activity quickly resumed. Currently, expectations are that oil prices have fallen further and faster than economic conditions warrant and that a modest rebound is forthcoming. Against this backdrop, both exploration and production companies as well as service companies will work to manage the short-run challenge posed by current prices, but steep behavior changes are only likely if expectations of future conditions worsen. While we have come to expect oil busts to follow oil booms, this may be the year of the oil ebb.

Our baseline forecast is for modest contractions in both the oil and gas and manufacturing sectors in 2015. The ripple effects of weakness in one of the state’s core industries will bring a year with employment gains just at or below the state’s long run average. The combined effect calls for private sector payroll growth of only 1 percent, with losses in mining and manufacturing offset by modest gains in construction, leisure services, health

services, and retail trade leading for the year.

Oklahoma City continues to enjoy the fruits of economic geography as economic activity concentrates along the Interstate 35 corridor megalopolis. Population growth in the city is among the fastest in the nation averaging nearly 1.6 percent per year since 2007. Importantly, Oklahoma City’s population growth rates trail the corridor cities to the south including Dallas, Austin, Houston and San Antonio, portending the continuation of economic growth up the corridor. As people and income congregate in the metro area, household demand for consumer services follow.

Oklahoma City’s 2014 growth was led by explosive gains in construction employment (up 12.1 percent) and employment in leisure services (up 8.8 percent). Also posting strong payroll gains in 2014 were health services and retail trade, two industries that follow naturally from population growth. Falling oil prices will slow the pace of income gains in 2015, particularly among those that rely on bonus checks, override income, or royalty payments to supplement monthly incomes. The expectation is that the momentum of long-run inertia is stronger than the forces of short-run weakness, leading to modest growth in 2015.

The baseline forecast is for private sector employment in the metro area to expand at a 1.7 percent annual pace – roughly half the four-year average established from 2011 to 2014. Employment gains will be led again by demand for consumer services including construction, leisure, health care and retail trade. Metro area unemployment rates are expected to tick up in 2015, averaging 4.3 percent for the year compared to the 4.1 percent average set in 2014. Oklahoma City per capita personal income is estimated to have grown to $44,899 in 2014 and is expected to reach $45,611 in 2015.


NATIONAL ECONOMIC OUTLOOK AND COMMENTARYU.S. real gross domestic product expanded at an annual rate of 3.5 percent in the fourth quarter of 2013. The momentum – carried largely by strong personal consumption expenditure growth – seemed sure to carry into 2014. Calls for the U.S. economy to expand at a rate of 3 percent or greater abounded (and we joined the chorus!). Then an unexpected and prolonged winter weather pattern set up over much of the U.S., followed by instability oversees as Russia annexed the Crimean Peninsula, disappointing economic performance in Europe, an Ebola outbreak in Africa,

and more. The combined result was a contraction of the U.S. economy in the first quarter of 2014 at an annual pace of -2.1 percent. The economy regrouped in the second quarter with pent up demand from the weather induced slump of the first quarter leading to a 4.6 percent expansion, followed by a 5.0 percent expansion in the third quarter. Initial estimates put fourth quarter growth at 3.2 percent. The strong finish to the year will offset much of the first-quarter contraction, leaving annual GDP growth near 2.7 percent.

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U.S. Real GDP, Annual Growth

U.S Real GDP


The fall in oil prices, while positive overall for consumers, will slow the pace of investment in growth in an energy industry that is increasingly important in the national economic landscape. General weakness abroad will likewise contain the U.S. upside in 2015. While much is still uncertain even as we begin the new year, we expect a modest year of expansion with the U.S growing at an annual rate of 2.5 percent in 2015 with baseline expectations of 3.1 percent growth in 2016.

The national labor market continues to improve slowly. Headline unemployment rates (currently 5.6 percent) overstate the strength of the labor market as participation rates and economic opportunities continue to limit opportunities for many workers.

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U.S. Unemployment Rate U.S. Nonfarm Employment

The U-6 measure of unemployment measures the share of the labor force and those marginally attached to the labor force that are unemployed and actively seeking employment, unemployed and willing to work but no longer actively seeking employment, and/or employed part-time for economic reasons. The U-6 unemployment rate is currently 11.2 percent and the labor force participation rate is at a low of 62.9 percent. Both measures indicate significant slack remains in the labor market – an important consideration when forming inflation expectations.

Indeed, the slack in the labor market is one reason the labor market continues to see an absence of significant wage gains. Stagnant wages and falling energy prices are combining to keep inflation and inflation expectations low in spite of years of terrifically accommodative monetary policy. Recent discussions from Federal Reserve officials seems to indicate that there is some appetite for delaying a pullback from zero short term interest rates as supporters argue that it is easier to maintain economic momentum than it is to regain economic momentum if rates are raised too soon.


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Federal Funds Rate and Treasury Yields

Fed Funds Rate

10-Year Treasury Yield

Core Consumer Price Index (Ex. Food & Energy)

Our baseline expectation remains a shift in Federal Reserve policy in mid-21015, but as indicated previously, momentum is growing to defer the rate hike until later in the year. Regardless, as the lone source of global economic strength, a movement to safe assets in 2015 is expected to maintain demand for U.S. treasuries and keep a lid on long-term rates. Our baseline forecast is for 10-year yields to average only 2.57 percent in 2015, even with a change in Fed policy. If the Fed holds short-term rates lower longer and if global weakness persists through much of the year, 10-year yields will struggle to reach even this level. Also reflected above is our forecast for inflation, with core price movements at 1.9 percent and 2.1 percent in 2015 and 2016 respectively. Expected inflation remains below the Federal

Reserve target offering cover for dovish policies to stay the norm in 2015.

National challenges remain with the uncertain future path of energy prices and global economic performance clouding the outlook. The U.S. economy faces its own challenges as the Federal Reserve takes

steps to normalize its balance sheet. Tax policy, immigration policy and health care policy all remain active topics for reform. Journal volumes could be filled with commentary on each of the challenges just identified and further

commentary here seems unnecessary. However, as concern about rising income inequality has moved to the forefront of many discussions, both local and national, a few comments may be merited.


Longer term trends of rising household income at the top of the income distribution relative to households at the bottom of the distribution have been exaggerated in the post-recession recovery. The recession hit working middle-class families (and men in particular) hardest. The steep declines in manufacturing and construction led the recessionary contraction. Falling home prices left many families exposed to the reality of being heavily leveraged in a single asset. Artificially low interest rates driven by Fed policy – zero Fed funds rate and successive rounds of quantitative easing – drove capital to equity markets and stock markets to all-time highs. The result was household income at the low end (dominated by weak labor market conditions and stagnant wages) stalling while household income at the top end (dominated by capital asset appreciation, rising rental and dividend income, etc.) grew substantially. The result is a not entirely unexpected rise in the household income gap.

A second long-term trend contributing to income inequality in the U.S. is the movement to and concentration of economic activity in large, densely populated urban areas. The income gap between households is in part a reflection of the income gap between urban and rural areas. Thus, income inequality is as much an issue of economic geography as economic policy. While a return (perhaps in 2016?) to widespread and sustained economic strength should generate wage and compensation gains and mitigate some of the rising inequality, policies to offset the urban/rural divide are not so clear. It is expected that issues of income inequality – both social and economic – will be part of the national economic discussion for generations to come.


Oklahoma nonfarm payroll employment grew at a 1.2 percent annual rate in 2013, a pace roughly equal to the state’s 10-year long-run average. Employment growth picked up in 2014 with preliminary estimates placing nonfarm employment growth at 1.9 percent. The two columns toward the far right on the table below compare the Oklahoma employment experience in the four years immediately prior to the great recession to the four years immediately following the great recession. From 2005-2008 Oklahoma nonfarm employment and private sector employment averaged annual growth of 2.1 percent. In the post-recession period, nonfarm employment growth has averaged 1.7 percent, slightly off the pace set during the previous expansion. Private sector payrolls, however, posted average growth of 2.2 percent in the post-recession period, slightly ahead of its 2.1 percent pace set during the previous expansion.

OKLAHOMA ECONOMIC CONDITIONS AND OUTLOOK

Growth Trends: Major Employment Sectors Oklahoma

Annual Growth 2011 2012 2013 2014

10-Year Average

2005-2014

Pre-Recession

Average 2005-2008

Post-Recession

Average 2011-2014 2015

Nonfarm 1.4% 2.3% 1.2% 1.9% 1.1% 2.1% 1.7% 0.9% Private 2.2% 2.7% 1.4% 2.4% 1.1% 2.1% 2.2% 1.0% Mining 17.6% 12.8% 2.6% 1.2% 6.9% 12.5% 8.5% -0.8% Construction 1.9% 3.1% 5.8% 3.7% 2.2% 4.8% 3.6% 2.3% Leisure and Hospitality 2.8% 3.0% 3.2% 4.9% 2.1% 2.2% 3.5% 3.0% Manufacturing 5.3% 4.5% 0.7% 2.9% 0.0% 1.3% 3.3% -0.3% Trade, Transport, Utilities 1.9% 2.7% 1.4% 2.2% 0.9% 1.3% 2.1% 1.5% Professional/Business Svcs. 2.1% 2.1% 1.2% 0.9% 1.2% 3.0% 1.6% -0.5% Education and Health 0.6% 1.4% 0.4% 2.3% 1.7% 2.3% 1.2% 1.9% Financial Activities -0.6% 0.8% 1.0% 3.0% -0.1% -0.2% 1.0% 1.4% Government -1.3% 0.9% 0.3% -0.2% 1.2% 2.1% -0.1% 0.5% Other Services -3.0% -0.3% -0.7% 2.0% -0.3% 1.0% -0.5% 1.3% Information -5.3% -2.2% -3.1% -3.4% -3.8% -1.9% -3.5% -2.6%


The state’s recovery and expansion have been led by the energy industry with annual employment growth of 17.6 percent and 12.8 percent in 2011 and 2012. Average growth in the employment of the state’s oil and gas companies slowed to 2.6 percent and 1.2 percent in 2013 and 2014. Employment strength in the construction, leisure and hospitality (primarily restaurants and hotels), and manufacturing sectors also contributed to the recovery with each averaging greater than 3.3 percent annual employment growth in the post-recession recovery.

Both the pre-recessionary and post-recessionary expansions served to underscore Oklahoma’s economic identity as an energy state. The physical reminders are everywhere from the corporate headquarters in Oklahoma City and Tulsa to the active rigs in western and south central Oklahoma and a myriad of service providers in between. The past path trod by the industry has left an undeniable imprint on the state’s economy and has largely carried the state’s recent economic development. The future path is less clear.

Crude oil spot prices hit a 2014 high in June at just over $107/barrel before starting a largely uninterrupted decline. Spot prices fell every week through the end of the year save two exceptions with the most recent weekly price gain realized in late September. Price drops foreshadow a slowdown in the rate of field development, rig activity, and extraction.

Rig activity peaked prior to the great recession in September of 2008 when the state averaged 212 active rigs for the month. By September of 2009 rig activity fell by 64 percent before growing off that low by 78 percent in 2010. Rig activity climbed through 2011, held steady in 2012, dropped modestly in 2013, and expanded in 2014 to return to peak levels nearly identical with September 2008.

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Oklahoma Active Rig Count, 2008-2014

Annual % Change Rig Activity Oklahoma Rigs


With rig activity nearly where it was in 2008 and watching prices fall far and fast for six months leaves many with anxieties of a 2008 repeat (or worse, a 1982-1986 repeat). The economic reactions to falling oil prices likely have as much to do with expectations of the future as concern over the present.

In 2008, the world was ending. The financial system was in widespread distress. The Federal Reserve balance sheet was growing in excess of 1,000 percent per year. For many, a global depression seemed not only plausible, but a reasonable expectation. Such was the fear, anxiety and uncertainty that defined the global economic system. In response to such anxieties and uncertainties, the economic world seemed to stop turning for a brief moment. Once the fear had passed and it became clear some economic normalcy would return (a new normal?), activity resumed and a quick rebound in the energy sector led the way in Oklahoma.

While there is considerable concern over the future price and production path today, no such rampant fears and anxieties characterize today’s oil market. As of now, expectations are that prices find a floor in the first half of 2015. As the price stabilizes around its floor, volatility will decrease, taking with it short term speculators who profit from volatile price swings, further decreasing price volatility. The price will then move through the second half of 2015 and 2016 in response to fundamental supply and demand changes – production decisions, supply disruptions, demand growth (or lack thereof), etc. We expect prices to rise during 2015 and 2016.

Our baseline forecast is for West Texas Intermediate crude prices to carry a monthly average price of $53.55 in 2015 and $60.51 in 2016. As a reminder, our crude oil (and natural gas) price forecasts are less about establishing a price prediction for oil than establishing a parameter for the economic outlook. Oil prices and projections will change often throughout the year, and certainly more complex and dynamic price forecasts exist than we have reported here.

The important takeaways from the preceding energy discussion are as follows. First, current expectations are very much different than they were in the fall of 2008 and early 2009. The most recent rig counts indicate rig activity has fallen from September

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WTI and Brent Oil Price, Monthly Average $/barrel

Price of WTI Crude (Monthly Average $/Barrel)Price of Brent Crude (Monthly Average $/Barrel)


2014 levels by 13.5 percent in North Dakota, 10 percent in Texas and 4 percent in Oklahoma. The national consensus seems to be for roughly 20 percent less rig activity nationally, with remaining rig activity concentrated in areas with high infrastructure and services already in place to minimize extraction costs. We expect rig activity to fall in Oklahoma as

well and certainly expect to see its impact on the state’s economy. However, unless expectations change (i.e. expectations that oil prices will fall significantly further and stay low significantly longer), the challenge should look very different from 2008 (and 1986). Second, the economic outlook is sensitive to oil price paths very much different from our baseline expectations. The economic forecast is robust to small variations in the time path of oil prices, but large variations will exert a much different impact on economic outcomes.

Oklahoma’s urban areas remain critical to the state’s economic health and indeed drive the state’s headline economic numbers. In the post-recession recovery the Oklahoma City market has been especially influential in state economic metrics. Tulsa has shown signs of strength, but remains more reliant than Oklahoma on national conditions and is expected to increase its pace of expansion as national conditions strengthen.

The importance of urban areas in determining the state’s headline economic numbers should not necessarily imply widespread economic weakness in the rural areas of the state. Oklahoma remains much less urbanized than the nation as a whole in part because of the economic opportunities available. A recent report released under The Equality of Opportunity Project examined the upward mobility of regions in the United States. Using a large data set that linked the birth certificates of children to their parent’s tax filings, they followed those children through their lives and on to their own tax filings as adults. The authors established a baseline probability of earning income in the top 20 percent of the income distribution (the top quintile) given that the individual was born into a household in the bottom 20 percent of the income distribution (the bottom quintile). The authors found a U.S. average rate of upward mobility of 7.5 percent - much lower than most of the developed world. However, the authors also found that upward mobility in the U.S., while relatively stable over time, varied greatly across regions.1

Regional upward mobility was computed for each commuting zone in the U.S. for which a sufficient number of observations existed. The relative upward mobility for key areas of Oklahoma are reported below. Given that an individual was born into a bottom quintile household in Woodward or Elk

1 See www.equality-of-opportunity for information on the studies and their authors.


Oklahoma and Upward Mobility

Area

Probability of Top Quintile Given Bottom

Quintile

Average Income Achievement Given Parents

in 25th Percentile Woodward 20.00% 53.30% Elk City 18.70% 50.90% Guymon 16.20% 50.40% Enid 14.90% 50.00% Ada 11.70% 45.50% Chickasha 11.50% 45.40% Altus 11.20% 45.60% Ardmore 11.10% 46.20% Lawton 10.50% 44.00% Stillwater 9.80% 45.80% Idabel 9.20% 43.30% Oklahoma City 8.20% 42.20% Okmulgee 8.10% 42.10% Tulsa 7.80% 41.60% U.S. National Average 7.50% NA Frederick 7.40% 45.60% Muskogee 6.30% 41.00% Source: equality-of-opportunity.org

City, their probability of moving to the top quintile as an adult was 20 percent and 18.7 percent respectively. Recall that the national average rate of upward mobility was 7.5 percent, suggesting that an individual born and raised in Woodward or Elk City was 2.5 times more likely to reach the top quintile than the national average. Individuals in Guymon or Enid were more than two times as likely to reach the top quintile. The mobility of remaining state areas can be interpreted similarly.

Note that at present, the unemployment rates for the areas just referenced are 2.5 percent (Elk City), 2.9 percent (Enid), 3.9 percent (Guymon), and 2.2 percent (Woodward). Economic opportunities in rural Oklahoma persist even as their share of the overall state performance diminishes.

Measures of Oklahoma’s gross domestic product are tied closely to the prices of oil and natural gas. Thus Oklahoma real gross domestic product increased by 4.2 percent in 2013 even as the pace of employment and earnings growth slowed considerably. While the pace of employment growth picked up in 2014, the downward trend in commodity prices is expected to offset this strength. Real gross domestic product is estimated to have expanded at a 2.9 percent pace in 2014, just slightly faster than the state’s long-run average. Low oil prices through 2015 are expected to conspire with slower employment growth as the state moves through what is shaping up to be a challenging year. Our baseline forecast is for real gross domestic product to grow at 1.9 percent in 2015 before returning to long-term trend growth of 3.1 percent in 2016.


4.2%

2.9%

1.9%

3.1%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ann

ual G

row

th, %

OK

RG

DP,

Mil

lion

s $2

005

Oklahoma Real Gross Domestic Product

Annual Growth OK Real Gross Domestic Product

1.1%

4.7%

2.7%

4.4%

45,023 46,991

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ann

ual G

row

th, %

Per

Cap

ita

Inco

me,

Cur

ren

t $

Oklahoma Per Capita Personal Income

Annual Growth, % OK Per Capita Personal Income


Oklahoma per-capita personal income growth slowed in 2013 – a combination of slowing employment and earnings growth and a modest increase in population growth. Per capita personal income growth accelerated in 2014 and is preliminarily estimated at 4.7 percent. A challenging economic environment in 2015 is expected to see per capita personal income grow at 2.7 percent to $45,023 before expanding at a more robust 4.4 percent annual pace in 2016 to $46,991.

We expect falling energy prices and global uncertainties to offset some of Oklahoma’s geographic strength and positive economic inertia from 2014. After growing at a rate of 1.9 percent in 2014, growth in state nonfarm employment is expected to moderate in 2015 with growth of 0.9 percent - just a touch below the state’s long-run average. Growth is expected to pick up in 2016 as global conditions improve bringing increases in the demand for commodities and industrial production, both important components of Oklahoma’s economy.

1.9% 0.9% 1.2%

4.1% 3.7%

6.7% 6.9% 5.9%

5.4% 5.4% 4.6% 4.8% 4.6%

1677.8 1698.7

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

1150.0

1250.0

1350.0

1450.0

1550.0

1650.0

1750.0

2007 2008 2009 2010 2011 2012 2013 2014 2015f 2016f

Une

mpl

oym

ent R

ate

/ An

nual

Gro

wth

NF

Empl

oym

ent

Stat

e N

onfa

rm E

mpl

oym

ent,

Tho

usan

ds

State Nonfarm Employment and Unemployment Rate

Annual Growth, Percent UnRate Nonfarm

Oklahoma’s unemployment rate averaged 4.6 percent for the year in 2014, down from 5.4 percent in 2013. We expect unemployment rates to be largely unchanged in 2015, with the state’s average unemployment rate for the year rising to 4.8 percent before returning to 4.6 percent in 2016.

As discussed previously, two of the principal sectors leading the state’s economic recovery are mining (oil and gas) and manufacturing. Oil and gas payroll employment grew at an annual rate of 17.6 percent and 12.8 percent in 2011 and 2012 respectively while manufacturing employment grew at rates of 5.3 percent and 4.5 percent over the same period. The pace of employment growth slowed considerably in 2013 and 2014 with mining posting gains of 2.6 percent and 1.2 percent and manufacturing 0.7 percent and 2.9 percent.


We do expect some short-run challenges to these industries as oil and natural gas prices remain low and their future price path unclear. Given the current expected price path of oil and global economic weakness, our baseline forecast looks for both of these key industries to contract modestly in 2015 with mining contracting at a rate of -0.8 percent in 2015 and manufacturing holding near current levels with a contraction of -0.3 percent. Both industries are projected to return to strength in 2016, growing at rates of 2.5 percent and 1.6 percent respectively.

The baseline projected path for Oklahoma in 2015 is really a tale of two trends. Short-run concerns in the state’s defining industry is offset by long-run strength as people and economic activity continue to concentrate in the state’s urban areas, specifically along the I-35 megalopolis. Industries closely tied to the state’s oil and gas industry are expected to be challenged in 2015 while industries more closely aligned with population and income gains are expected to benefit from the underlying long term trend growth.

1.2%

-0.8%

2.5% 2.9%

-0.3%

1.6%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

2007 2008 2009 2010 2011 2012 2013 2014 2015f 2016f

Ann

ual G

row

th, P

erce

nt

Payr

oll E

mpl

oym

ent,

Tho

usan

ds

Oklahoma Mining and Manufacturing Employment

Annual Growth, Percent Annual Growth, Percent

Mining Manufacturing


The sectors forecasted to experience the greatest employment growth are health services, retail trade, leisure and hospitality, and construction (listed in order of their share of total state employment). In contrast, the sectors (again listed in order of their total share of state employment) expected to struggle in 2015 are manufacturing, scientific and technical business services, mining and information.

Oklahoma private sector average weekly earnings are expected to grow at a 1.9 percent rate in 2015 after growing at a rate of 2.1 percent in 2014. Average weekly earnings growth follows the mix of job gains, expected to be concentrated in 2015 in lower-growth industries (retail trade, food services, etc.).

State Employment Forecast Top Growth Sectors 2015 Forecast Bottom Growth Sectors 2015 Forecast

Health Services 2.0% Manufacturing -0.3% Retail Trade 1.8% Scientific and Technical Services -1.8%

Leisure & Hospitality 3.0% Mining -0.8% Construction 2.3% Information -2.6%

Source: Steven C. Agee Economic Research and Policy Institute

Oklahoma Private Sector Weekly Earnings Year Average Weekly Earnings Annual Growth 2008 618.41 2.0% 2009 633.91 2.5% 2010 682.81 7.7% 2011 720.39 5.5% 2012 739.86 2.7% 2013 742.35 0.3% 2014 757.95 2.1% 2015 772.12 1.9% 2016 787.28 2.0% Source: Steven C. Agee Economic Research and Policy Institute


Oklahoma City has experienced an economic recovery envied by many metropolitan areas across the U.S. The recovery is all the more impressive when considering the tenuous national and global economic conditions that have characterized the last four years. Oklahoma City’s recovery was led by explosive growth in the oil and gas sector with employment growth of 18.9 percent and 15.3 percent in 2011 and 2012 respectively. Oil and gas growth was accompanied by related growth in manufacturing with employment growing at 6.1 percent and 6.7 percent in 2011 and 2012. Mining and manufacturing growth slowed in 2013 and was largely flat in 2014. Replacing mining and manufacturing as the metro area’s lead growth sectors were construction and leisure services, growing at 12.2 percent and 8.8 percent respectively in 2014.

OKLAHOMA CITY ECONOMIC CONDITIONS AND OUTLOOK

Oklahoma City Growth Trends: Major Employment Sectors

Year 2011 2012 2013 2014 10-Year Average

4-Year Average

(Post Recession)

4-Year Average (2005-2008) 2015

Nonfarm 2.3% 2.4% 2.2% 2.9% 1.4% 2.5% 1.7% 1.7%

Private 3.0% 2.9% 2.2% 3.2% 1.4% 2.8% 1.7% 1.7%

Mining 18.9% 15.3% 2.6% 0.9% 8.9% 9.4% 15.2% -2.0%

Leisure and Hospitality 4.2% 2.8% 4.7% 8.8% 2.8% 5.1% 1.7% 3.7%

Construction 2.8% 2.3% 2.6% 12.2% 2.8% 5.0% 4.2% 5.6%

Manufacturing 6.1% 6.7% 3.1% -0.1% -0.6% 4.0% -1.3% -0.8%

Trade, Transport, Utilities 2.9% 2.9% 3.7% 3.0% 1.3% 3.1% 1.0% 1.8%

Financial Activities -0.6% 3.1% 1.8% 5.4% 0.2% 2.4% -0.9% 2.5%

Education and Health Services 1.4% 2.4% 1.7% 2.8% 2.0% 2.1% 2.6% 2.7%

Professional Business Services 3.6% 1.2% 0.8% -1.0% 1.2% 1.2% 3.1% -0.3%

Government -0.2% 0.7% 2.1% 1.9% 1.3% 1.1% 1.4% 1.6%

Other Services 0.0% -1.3% -3.1% -1.1% -0.8% -1.4% 0.8% -2.8%

Information -6.3% -4.4% -5.8% -2.3% -5.2% -4.7% -2.6% -2.5%


Oklahoma City’s economic momentum is a combination of short run explosive growth in oil and gas employment and long run transitions in economic geography. Longer run trends are consolidating economic activity in dense, amenity-rich urban environments. Oklahoma City’s location within the I-35 megalopolis region and its proactive development of a central city amenity complex continue to drive population and economic activity to central Oklahoma. The combined result is a cycle of growth in core industries further encouraging a concentration of people and economic activity which in turn drives demand for consumer services.

Oklahoma City private sector employment grew at 3.2 percent in 2014, twice the pace of the city’s 10-year average and a full 1.5 percentage points above the average pace set during the pre-recession expansion from 2005-2008. Oklahoma City’s growth experience is trending towards the experience of major metro areas to the south on the I-35 corridor (Dallas, San Antonio, Austin and Houston) and is increasingly dissimilar from the northern corridor cities (Tulsa and Kansas City).

I-35 Corridor Cities: Nonfarm Payroll Growth City 1991-2011 2012 2013 2014

Austin 3.5% 3.4% 4.5% 3.7% Houston 2.0% 3.2% 3.5% 3.6%

Dallas 1.9% 2.7% 2.6% 3.5% Oklahoma City 1.4% 2.3% 2.2% 2.9%

San Antonio 2.2% 2.0% 2.8% 2.4% Sherman-Dennison 0.6% 0.7% 2.3% 1.6%

Tulsa 1.1% 1.1% 1.5% 1.5% Kansas City 1.2% 2.0% 1.0% 0.6%

The outlook for 2015 is a contradiction of two forces: falling oil prices and price uncertainty straining the economy’s core industry while long-run patterns of economic geography favor future growth.

Oklahoma City nonfarm employment is expected to slow in 2015 as a drag in the state’s core oil and gas industry offsets strength in core household service industries. Nonfarm employment grew at a robust 2.9 percent in 2014 and has averaged 2.5 percent growth per year since Oklahoma emerged from the great recession. Nonfarm employment is expected to grow at roughly half its 2014 pace in 2015, posting a moderate expansion of 1.7 percent. Unemployment rates are expected to increase through the first half of the year and average 4.3 percent for the year before falling back to 4.1 percent in 2016.


While the city’s oil and gas industry accounts for only 3 percent of total employment, it exerts a considerably larger influence on the city’s economic health. Growth in oil and gas employment spurred large gains in the average weekly earnings of Oklahoma City workers. Oil and gas employment grew at annual rates of 18.9 percent and 15.3 percent in 2011 and 2012 as industry employment in the city more than doubled in size in the last 10 years. Average monthly payrolls are projected to decline by 2.0 percent in 2015 – a drop in average monthly payroll size of approximately 400 workers. Employment is expected to return to 2014 levels in 2016 as prices improve.

It is worth emphasizing again that current forecasts are dependent on the realization of current price expectations. The expected future path of crude oil prices are that prices move lower in the first half of 2015 before improving through the end of the year, with oil prices averaging about $55 for the year. A significant improvement in the expected price path of oil could stave off the contraction. A prolonged price fall and the industry adopting expectations that the future price path is considerably more pessimistic would exaggerate the local economic impact in 2015.

1.7% 2.7%

4.3% 4.1%

559.2

635.4 652.3

-5.0%

0.0%

5.0%

10.0%

15.0%

380.0

430.0

480.0

530.0

580.0

630.0

680.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 An

nual

Gro

wth

, Per

cen

t / U

nem

ploy

men

t Rat

e

Non

farm

Em

ploy

men

t, T

hous

ands

Oklahoma City MSA Nonfarm Employment and Unemployment Rate

Annual Growth, Percent OKC Unemployment Rate Nonfarm


15.3%

2.6% 0.5%

-2.0%

2.5%

10.5

19.8 20.3

-35.0%

-25.0%

-15.0%

-5.0%

5.0%

15.0%

25.0%

35.0%

0.0

5.0

10.0

15.0

20.0

25.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ann

ual G

row

th, P

erce

nt

Min

ing

Empl

oym

ent,

Tho

usan

ds

Oklahoma City MSA Mining Employment

Annual Growth, Percent Mining Employment

The demand for household consumption services including construction, retail trade, health and leisure services surged in 2014, driving employment gains across these sectors of 12.1 percent, 3.6 percent, 2.8 percent, and 8.8 percent respectively. Strength in these industries is a reflection of local population and income gains – long-term trends that are expected to continue in contrast to short-run challenges posed by falling oil and natural gas prices. The positive inertia from these industries is expected to carry into 2015 with employment gains of 5.6 percent (construction), 2.4 percent (retail trade), 2.7 percent (education and health services), and 3.7 percent (leisure services).


2.8% 2.3% 2.6%

12.1%

5.6% 5.9%

1.8% 1.8%

2.4%

3.6%

2.4% 2.4%

1.4%

2.4%

1.7%

2.8% 2.7% 3.0% 4.2%

2.8%

4.7%

8.8%

3.7% 4.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2011 2012 2013 2014 2015 2016

Ann

ual G

row

th, P

erce

nt

Oklahoma City MSA: 2015 Leading Growth Sectors

Construction Retail Trade Education & Health Services Leisure Services

3.3%

2.5% 2.8%

68.7

81.3 83.3

85.6

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

50.0

55.0

60.0

65.0

70.0

75.0

80.0

85.0

90.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ann

ual G

row

th, P

erce

nt

Hea

lth

Serv

ices

Em

ploy

men

t, T

hous

ands

Oklahoma City MSA Health Services

Annual Growth, Percent Health Services


Oklahoma City’s sustained population growth through the recession and into recovery sets it apart as one of the nation’s fastest growing cities. Oklahoma City MSA population grew 7.13 percent from 2007-2011 as much of the nation struggled through recession. Population growth has carried into the recovery and is poised to continue as inertia and economic geography favor continuation of long-term trends in the city’s economic development. Population gains and the impending aging of the baby boomers have led to significant growth in health services employment as providers position to meet current and expected future demand. Health services employment has grown from 68,700 in 2005 to 81,300 in 2014. Employment growth is expected to slow only modestly in 2015 and 2016 as employment in the industry is expected to reach 85,600 in 2016.

Concentrations of people, income, and economic activity in the metro area have spurred local demand for housing and commercial development. Construction employment surged in 2014, growing at an annual rate of 12.1 percent to an average monthly payroll employment of 30,500. Development seems poised to carry into 2015, leading to employment gains in the industry of 5.6 percent in 2015 and 5.9 percent in 2016. Construction projects and retail trade development are particularly susceptible to further slides in oil and natural gas prices and changing expectations that prices could stay lower, longer. Our baseline case hinges on the realization of our expectation that oil prices fall modestly through the first quarter of the year before stabilizing and rising through year’s end.


As with construction and health services, people and income concentrations in the Oklahoma City metro area have preceded and predicted growth in the demand for the arts, accommodations and food services. Oklahoma City experienced strong gains on all fronts in 2014 from both national chains and local development. Oklahoma’s food scene is gathering both regional and national attention as restaurants and nightlife contribute to the city’s rapidly developing amenity package often cited as an attraction for the city’s growing millennial population. Leisure services employment is poised to grow in 2015 at a 3.7 percent annual rate.

12.1%

5.6% 5.9%

25.2

30.5 32.2

34.1

-7.5%

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2.5%

7.5%

12.5%

17.5%

22.5%

10.0

15.0

20.0

25.0

30.0

35.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ann

ual G

row

th, P

erce

nt

Con

stru

ctio

n E

mpl

oym

ent,

Tho

usan

ds

Oklahoma City MSA Construction Employment

Annual Growth, Percent Construction

8.8%

3.7% 4.4%

55.1

70.3 72.9

76.1

0.0%

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ann

ual G

row

th, P

erce

nt

Leis

ure

Serv

ices

Em

ploy

men

t, T

hous

ands

Oklahoma City MSA Leisure Services Employment

Annual Growth, Percent Leisure Services

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-141

5.7

-1,2

94.2

-1

,296

.8

-1,0

89.2

-6

80.2

-4

83.4

-4

83.2

-5

22.6

So

urce

: Ste

ven

C. A

gee

Econ

omic

Res

earc

h an

d Po

licy

Inst

itute

; Mac

road

vise

rs M

AU

S 20

12 M

odel

28

App

endi

x B

: Sta

tew

ide

Empl

oym

ent a

nd E

arni

ngs

His

tory

and

For

ecas

t O

klah

oma

Stat

ewid

e Em

ploy

men

t an

d Ea

rnin

gs

Var

iabl

e/Ye

ar

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

f 20

16f

Non

farm

15

25.2

15

65.7

15

94.9

16

18.4

15

67.6

15

56.0

15

77.7

16

14.1

1633

.1 16

63.6

16

77.8

16

98.7

Ann

ual G

row

th, P

erce

nt

2.6%

2.

7%

1.9%

1.5

%

-3.1%

-0

.7%

1.4

%

2.3%

1.2

%

1.9%

0.

9%

1.2%

Priv

ate

1204

.3

1236

.1 12

61.0

12

81.2

12

19.3

12

07.5

12

33.8

12

66.9

12

84.8

13

15.9

13

28.7

13

47.9

Ann

ual G

row

th, P

erce

nt

2.3%

2.

6%

2.0%

1.6

%

-4.8

%

-1.0

%

2.2%

2.

7%

1.4%

2.

4%

1.0%

1.4

%

Min

ing

36.0

42

.0

46.6

52

.0

43.4

43

.8

51.5

58

.1 59

.6

60.3

59

.8

61.3

Ann

ual G

row

th, P

erce

nt

10.8

%

16.7

%

11.0%

11.

6%

-16.

5%

0.9%

17

.6%

12

.8%

2.

6%

1.2%

-0

.8%

2.

5%

Con

stru

ctio

n 66

.1 70

.3

71.3

75

.6

68.9

67

.0

68.3

70

.4

74.5

77

.3

79.1

81.7

Ann

ual G

row

th, P

erce

nt

5.3%

6.

4%

1.4%

6.

0%

-8.9

%

-2.8

%

1.9%

3.

1%

5.8%

3.

7%

2.3%

3.

3%

Man

ufac

turi

ng

144.

8 14

9.2

151.3

14

9.8

129.

3 12

3.3

129.

8 13

5.6

136.

5 14

0.4

140

142.

2

Ann

ual G

row

th, P

erce

nt

1.8%

3.

0%

1.4%

-1

.0%

-1

3.7%

-4

.6%

5.

3%

4.5%

0.

7%

2.9%

-0

.3%

1.6

%

Trad

e, T

rans

port

, & U

tilit

ies

279.

3 28

3.6

287.

5 28

9.3

281.3

27

7.3

282.

7 29

0.4

294.

4 30

1.0

305.

4 30

8.4

Ann

ual G

row

th, P

erce

nt

1.6%

1.5

%

1.4%

0.

6%

-2.8

%

-1.4

%

1.9%

2.

7%

1.4%

2.

2%

1.5%

1.0

%

Who

lesa

le

56.5

58

.4

59.4

59

.3

56.2

55

.6

57.9

60

.3

61.9

63

.7

64.1

64.8

Ann

ual G

row

th, P

erce

nt

3.1%

3.

4%

1.7%

-0

.2%

-5

.2%

-1

.1%

4.1%

4.

1%

2.7%

2.

8%

0.7%

1.1

%

Reta

il 16

9.8

170.

1 17

1.2

173.

0 16

9.9

168.

6 17

0.5

173.

2 17

4.4

179.

5 18

2.8

185.

2

Ann

ual G

row

th, P

erce

nt

1.0%

0.

2%

0.6%

1.1

%

-1.8

%

-0.8

%

1.1%

1.6

%

0.7%

2.

9%

1.8%

1.3

%

Tran

spor

tati

on &

Util

itie

s 53

.0

55.2

56

.9

57.1

55.3

53

.0

54.3

57

.0

58.2

57

.8

58.5

58

.4

Ann

ual G

row

th, P

erce

nt

2.1%

4.

2%

3.1%

0.

4%

-3.2

%

-4.2

%

2.5%

5.

0%

2.1%

-0

.8%

1.3

%

-0.2

%

Info

rmat

ion

30.2

29

.8

28.8

28

.7

26.8

24

.3

23.0

22

.5

21.8

21

.1 20

.5

20.7

Ann

ual G

row

th, P

erce

nt

-2.6

%

-1.3

%

-3.4

%

-0.3

%

-6.6

%

-9.3

%

-5.3

%

-2.2

%

-3.1%

-3

.4%

-2

.6%

1.0

%

Fina

ncia

l Act

iviti

es

83.1

83.4

82

.9

83.2

81

.5

79.9

79

.4

80.0

80

.8

83.2

84

.4

85.8

Ann

ual G

row

th, P

erce

nt

-1.0

%

0.4%

-0

.6%

0.

4%

-2.0

%

-2.0

%

-0.6

%

0.8%

1.0

%

3.0%

1.4

%

1.7%

Prof

essi

onal

Bus

ines

s 17

0.4

175.

8 18

1.6

183.

4 16

7.9

170.

7 17

4.3

177.

9 18

0.0

181.6

18

0.6

182.

6

Ann

ual G

row

th, P

erce

nt

4.7%

3.

2%

3.3%

1.0

%

-8.5

%

1.7%

2.

1%

2.1%

1.2

%

0.9%

-0

.5%

1.1

%

Scie

ntifi

c &

Tec

hnic

al

59.2

61

.2

63.4

64

.9

62.9

63

.5

64.3

65

.9

66.6

64

.7

63.5

64

.1

Ann

ual G

row

th, P

erce

nt

2.8%

3.

4%

3.6%

2.

4%

-3.1%

1.0

%

1.3%

2.

5%

1.1%

-2

.9%

-1

.8%

0.

9%

Man

agem

ent

12.5

12

.7

13.4

14

.4

14.5

14

.6

15.2

16

.2

16.8

16

.9

16.9

17

.1

Ann

ual G

row

th, P

erce

nt

-0.8

%

1.6%

5.

5%

7.5%

0.

7%

0.7%

4.

1%

6.6%

3.

7%

0.3%

0.

3%

1.1%

Adm

inis

trat

ive

Supp

ort

98.8

10

1.8

104.

8 10

4.1

90.5

92

.6

94.7

95

.9

96.7

10

0.0

100.

2 10

1.4

Ann

ual G

row

th, P

erce

nt

6.8%

3.

0%

2.9%

-0

.7%

-1

3.1%

2.

3%

2.3%

1.3

%

0.8%

3.

5%

0.1%

1.2

%

29

Okl

ahom

a St

atew

ide

Empl

oym

ent a

nd

Earn

ings

, con

tinu

ed

Var

iabl

e/Ye

ar

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

f 20

16f

Educ

atio

n /

Hea

lth

200.

8 20

4.8

210.

1 21

4.8

218.

6 22

1.7

223.

1 22

6.2

227.

2 23

2.4

236.

9 24

1.1

Ann

ual G

row

th, P

erce

nt

2.2%

2.

0%

2.6%

2.

2%

1.8%

1.4

%

0.6%

1.4

%

0.4%

2.

3%

1.9%

1.8

%

Educ

atio

n 16

.8

16.9

17

.0

17.4

18

.1 18

.4

19.0

19

.2

19.2

19

.0

19.3

19

.6

Ann

ual G

row

th, P

erce

nt

6.3%

0.

6%

0.6%

2.

4%

4.0%

1.7

%

3.3%

1.1

%

0.0%

-0

.9%

1.5

%

1.6%

H

ealth

18

4.0

187.

9 19

3.1

197.

3 20

0.4

203.

3 20

4.1

207.

0 20

8.0

213.

4 21

7.6

221.5

A

nnua

l Gro

wth

, Per

cent

1.9

%

2.1%

2.

8%

2.2%

1.6

%

1.4%

0.

4%

1.4%

0.

5%

2.6%

2.

0%

1.8%

Le

isur

e &

Hos

pita

lity

132.

4 13

5.6

137.

8 14

1.0

140.

0 13

9.0

142.

9 14

7.2

151.9

15

9.3

164.

1 16

8.0

Ann

ual G

row

th, P

erce

nt

2.6%

2.

4%

1.6%

2.

3%

-0.7

%

-0.7

%

2.8%

3.

0%

3.2%

4.

9%

3.0%

2.

4%

Art

s 13

.9

14.2

14

.6

15.6

14

.4

14.3

14

.1 14

.3

14.7

15

.5

15.9

16

.1 A

nnua

l Gro

wth

, Per

cent

2.

2%

2.2%

2.

8%

6.8%

-7

.7%

-0

.7%

-1

.4%

1.4

%

2.8%

5.

8%

2.3%

1.0

%

Food

& A

ccom

mod

atio

n 118

.5

121.4

12

3.2

125.

4 12

5.6

124.

7 12

8.8

132.

9 13

7.2

143.

7 14

8.2

151.9

A

nnua

l Gro

wth

, Per

cent

2.

6%

2.4%

1.5

%

1.8%

0.

2%

-0.7

%

3.3%

3.

2%

3.2%

4.

8%

3.1%

2.

5%

Oth

er

61.1

61.7

63

.1 63

.5

61.6

60

.6

58.8

58

.6

58.2

59

.4

60.1

61.0

A

nnua

l Gro

wth

, Per

cent

0.

2%

1.0%

2.

3%

0.6%

-3

.0%

-1

.6%

-3

.0%

-0

.3%

-0

.7%

2.

0%

1.3%

1.4

%

Gov

ernm

ent

320.

9 32

9.6

333.

9 33

7.3

348.

3 34

8.5

343.

9 34

7.1

348.

3 34

7.7

349.

2 35

4.9

Ann

ual G

row

th, P

erce

nt

3.4%

2.

7%

1.3%

1.0

%

3.3%

0.

1%

-1.3

%

0.9%

0.

3%

-0.2

%

0.5%

1.6

%

Fede

ral

45.9

45

.8

45.3

45

.2

46.6

50

.4

49.1

48.4

47

.2

46.7

46

.6

47.0

A

nnua

l Gro

wth

, Per

cent

-0

.4%

-0

.2%

-1

.1%

-0.2

%

3.1%

8.

2%

-2.6

%

-1.4

%

-2.5

%

-1.1%

-0

.3%

0.

9%

Stat

e 82

.4

83.4

83

.7

84.1

85.1

83.8

84

.8

86.4

86

.3

85.5

85

.4

85.9

A

nnua

l Gro

wth

, Per

cent

1.6

%

1.2%

0.

4%

0.5%

1.2

%

-1.5

%

1.2%

1.9

%

-0.1%

-0

.9%

-0

.2%

0.

6%

Loca

l 19

2.7

200.

5 20

4.8

207.

9 21

6.7

214.

3 20

9.9

212.

4 21

4.8

215.

4 21

7.3

222.

0 A

nnua

l Gro

wth

, Per

cent

5.

2%

4.0%

2.

1%

1.5%

4.

2%

-1.1%

-2

.1%

1.2%

1.1

%

0.3%

0.

9%

2.2%

St

ate

Labo

r Fo

rce

and

Un

empl

oym

ent R

ate

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

f 20

16f

Une

mpl

oyed

76

,851

71

,101

71,3

05

65,18

8 117

,615

12

2,37

8 10

5,62

0 96

,230

98

,623

83

,583

85

,983

84

,629

A

nnua

l Gro

wth

, Per

cent

-8

.6%

-7

.5%

0.

3%

-8.6

%

80.4

%

4.0%

-1

3.7%

-8

.9%

2.

5%

-15.

2%

2.9%

-1

.6%

Em

ploy

ed

1,628

,655

1,6

50,0

70

1,663

,632

1,6

75,9

65

1,646

,939

1,6

53,0

20

1,671

,412

1,6

97,6

18

1,718

,171

1,717

,947

1,7

12,10

9

1,740

,081

A

nnua

l Gro

wth

, Per

cent

1.4

%

1.3%

0.

8%

0.7%

-1

.7%

0.

4%

1.1%

1.6

%

1.2%

0.

0%

-0.3

%

1.6%

La

bor

Forc

e 1,7

05,5

06

1,721

,171

1,734

,937

1,7

41,15

3

1,764

,554

1,7

75,3

98

1,777

,032

1,7

93,8

48

1,816

,794

1,8

01,5

30

1,798

,092

1,8

24,7

10

Ann

ual G

row

th, P

erce

nt

0.9%

0.

9%

0.8%

0.

4%

1.3%

0.

6%

0.1%

0.

9%

1.3%

-0

.8%

-0

.2%

1.5

%

Un.

Rat

e 4.

5%

4.1%

4.

1%

3.7%

6.

7%

6.9%

5.

9%

5.4%

5.

4%

4.6%

4.

8%

4.6%

O

K W

eekl

y Ea

rnin

gs

606.

55

618.

41

633.

91

682.

81

720.

39

739.

86

742.

35

757.

95

772.

12

787.

28

Ann

ual G

row

th, P

erce

nt

2.

0%

2.5%

7.

7%

5.5%

2.

7%

0.3%

2.

1%

1.9%

2.

0%

Sour

ce: S

teve

n C

. Age

e Ec

onom

ic R

esea

rch

and

Polic

y In

stit

ute

30

App

endi

x C

: Okl

ahom

a C

ity

Empl

oym

ent a

nd

Earn

ings

His

tory

an

d Fo

reca

st

Okl

ahom

a C

ity

Met

ro A

rea

Empl

oym

ent O

utlo

ok

Var

iabl

e /

Year

20

05

2006

20

07

2008

20

09

2010

20

11

2012

20

13

2014

20

15

2016

Non

farm

55

9.2

568.

9 57

6.9

584.

4 56

8.1

566.

9 58

0.1

594.

2 60

7.2

624.

9 63

5.4

652.

3

Ann

ual G

row

th, P

erce

nt

2.2%

1.7

%

1.4%

1.3

%

-2.8

%

-0.2

%

2.3%

2.

4%

2.2%

2.

9%

1.7%

2.

7%

Priv

ate

445.

1 45

3.2

459.

2 46

5.9

447.

4 44

4.9

458.

4 47

1.7

482.

1 49

7.4

505.

8 52

1.1

Ann

ual G

row

th, P

erce

nt

2.4%

1.8

%

1.3%

1.5

%

-4.0

%

-0.6

%

3.0%

2.

9%

2.2%

3.

2%

1.7%

3.

0%

Min

ing

10.5

12

.8

14.4

16

.0

13.5

14

.3

17.0

19

.6

20.1

20.2

19

.8

20.3

Ann

ual G

row

th, P

erce

nt

15.4

%

21.9

%

12.5

%

11.1%

-1

5.6%

5.

9%

18.9

%

15.3

%

2.6%

0.

5%

-2.0

%

2.5%

Con

stru

ctio

n 25

.2

26.4

26

.6

27.7

25

.8

25.2

25

.9

26.5

27

.2

30.5

32

.2

34.1

Ann

ual G

row

th, P

erce

nt

7.2%

4.

8%

0.8%

4.

1%

-6.9

%

-2.3

%

2.8%

2.

3%

2.6%

12

.1%

5.6%

5.

9%

Man

ufac

turi

ng

38.6

38

.3

37.0

37

.0

32.5

31

.0

32.9

35

.1 36

.2

36.2

35

.9

36.3

Ann

ual G

row

th, P

erce

nt

-1.0

%

-0.8

%

-3.4

%

0.0%

-1

2.2%

-4

.6%

6.

1%

6.7%

3.

1%

0.0%

-0

.8%

1.1

%

Trad

e, T

rans

port

& U

tilit

y 99

.0

100.

3 10

1.2

100.

7 97

.5

97.2

10

0.0

102.

9 10

6.7

109.

9 111

.9

115

Ann

ual G

row

th, P

erce

nt

2.3%

1.3

%

0.9%

-0

.5%

-3

.2%

-0

.3%

2.

9%

2.9%

3.

7%

3.0%

1.8

%

2.8%

Who

lesa

le T

rade

21

.7

22.7

22

.9

23.0

21

.9

22.1

23.4

24

.9

26.6

27

.3

27.9

29

.1

Ann

ual G

row

th, P

erce

nt

3.3%

4.

6%

0.9%

0.

4%

-4.8

%

0.9%

5.

9%

6.4%

6.

8%

2.6%

2.

2%

4.3%

Reta

il Tr

ade

61.4

61

.5

62.0

62

.3

60.2

60

.1 61

.2

62.3

63

.8

66.1

67.7

69

.3

Ann

ual G

row

th, P

erce

nt

1.7%

0.

2%

0.8%

0.

5%

-3.4

%

-0.2

%

1.8%

1.8

%

2.4%

3.

6%

2.4%

2.

4%

Tran

spor

tati

on &

Util

itie

s

15.9

16

.0

16.3

15

.5

15.4

15

.0

15.4

15

.6

16.3

16

.5

16.6

16

.9

Ann

ual G

row

th, P

erce

nt

3.2%

0.

6%

1.9%

-4

.9%

-0

.6%

-2

.6%

2.

7%

1.3%

4.

5%

1.2%

0.

6%

1.8%

Info

rmat

ion

13.4

13

.2

12.3

12

.2

11.1

9.6

9.0

8.6

8.1

7.9

7.7

7.6

Ann

ual G

row

th, P

erce

nt

-1.5

%

-1.5

%

-6.8

%

-0.8

%

-9.0

%

-13.

5%

-6.3

%

-4.4

%

-5.8

%

-2.5

%

-2.5

%

-1.3

%

Fina

ncia

l Act

iviti

es

34.5

34

.5

34.4

34

.2

33.2

32

.8

32.6

33

.6

34.2

36

.0

36.9

38

.6

Ann

ual G

row

th, P

erce

nt

-2.5

%

0.0%

-0

.3%

-0

.6%

-2

.9%

-1

.2%

-0

.6%

3.

1%

1.8%

5.

3%

2.5%

4.

6%

Prof

essi

onal

& B

usin

ess

Serv

ices

70

.0

72.2

74

.8

75.1

69.9

71

.4

74.0

74

.9

75.5

74

.6

74.4

76

.0

Ann

ual G

row

th, P

erce

nt

5.3%

3.

1%

3.6%

0.

4%

-6.9

%

2.1%

3.

6%

1.2%

0.

8%

-1.2

%

-0.3

%

2.2%

Scie

ntifi

c &

Tec

hnic

al S

ervi

ces

25.4

26

.7

27.4

28

.2

27.6

28

.3

29.2

30

.0

29.7

28

.9

28.5

28

.9

Ann

ual G

row

th, P

erce

nt

2.4%

5.

1%

2.6%

2.

9%

-2.1%

2.

5%

3.2%

2.

7%

-1.0

%

-2.7

%

-1.4

%

1.4%

Man

agem

ent o

f Com

pani

es

4.8

5.1

5.9

6.1

5.5

5.5

6.0

6.9

7.1

7.2

7.4

7.5

Ann

ual G

row

th, P

erce

nt

0.0%

6.

3%

15.7

%

3.4%

-9

.8%

0.

0%

9.1%

15

.0%

2.

9%

1.4%

2.

8%

1.4%

Adm

inis

trat

ive

& S

uppo

rt S

ervi

ces

39.8

40

.5

41.6

40

.8

36.8

37

.6

38.9

38

.0

38.7

38

.5

38.5

39

.6

Ann

ual G

row

th, P

erce

nt

7.6%

1.8

%

2.7%

-1

.9%

-9

.8%

2.

2%

3.5%

-2

.3%

1.8

%

-0.5

%

0.0%

2.

9%

31

Okl

ahom

a C

ity

Met

ro A

rea

Empl

oym

ent O

utlo

ok, c

onti

nued

Var

iabl

e /

Year

20

05

2006

20

07

2008

20

09

2010

20

11

2012

20

13

2014

20

15

2016

Educ

atio

n &

Hea

lth S

ervi

ces

75.7

76

.8

79.3

82

.2

82.9

83

.2

84.4

86

.4

87.9

90

.4

92.8

95

.6

Ann

ual G

row

th, P

erce

nt

1.9%

1.5

%

3.3%

3.

7%

0.9%

0.

4%

1.4%

2.

4%

1.7%

2.

8%

2.7%

3.

0%

Hea

lth

Serv

ices

68

.7

70.1

72.1

74.6

74

.8

74.8

75

.5

77.4

78

.7

81.3

83

.3

85.6

Ann

ual G

row

th, P

erce

nt

1.5%

2.

0%

2.9%

3.

5%

0.3%

0.

0%

0.9%

2.

5%

1.7%

3.

3%

2.5%

2.

8%

Leis

ure

Serv

ices

55

.1 55

.8

56.0

57

.1 57

.6

57.6

60

.0

61.7

64

.6

70.3

72

.9

76.1

Ann

ual G

row

th, P

erce

nt

3.2%

1.3

%

0.4%

2.

0%

0.9%

0.

0%

4.2%

2.

8%

4.7%

8.

8%

3.7%

4.

4%

Oth

er S

ervi

ces

23.2

23

.0

23.2

23

.9

23.3

22

.7

22.7

22

.4

21.7

21

.5

20.9

21

.0

Ann

ual G

row

th, P

erce

nt

0.0%

-0

.9%

0.

9%

3.0%

-2

.5%

-2

.6%

0.

0%

-1.3

%

-3.1%

-0

.9%

-2

.8%

0.

5%

Gov

ernm

ent

114.1

115.7

117

.7

118.5

12

0.8

122.

0 12

1.7

122.

5 12

5.1

127.

5 12

9.6

131.2

Ann

ual G

row

th, P

erce

nt

1.7%

1.4

%

1.7%

0.

7%

1.9%

1.0

%

-0.2

%

0.7%

2.

1%

1.9%

1.6

%

1.2%

Fede

ral

26.6

26

.4

26.3

25

.7

26.2

28

.1 28

.4

28.2

27

.6

27.2

27

.0

27.0

Ann

ual G

row

th, P

erce

nt

-1.1%

-0

.8%

-0

.4%

-2

.3%

1.9

%

7.3%

1.1

%

-0.7

%

-2.1%

-1

.4%

-0

.7%

0.

0%

Stat

e 39

.8

40.3

41

.6

41.6

42

.0

41.7

42

.1 42

.4

43.5

44

.2

44.8

45

.4

Ann

ual G

row

th, P

erce

nt

1.8%

1.3

%

3.2%

0.

0%

1.0%

-0

.7%

1.0

%

0.7%

2.

6%

1.6%

1.4

%

1.3%

Loca

l 47

.8

48.9

49

.8

51.2

52

.6

52.2

51

.3

51.9

54

.0

56.2

57

.8

58.8

Ann

ual G

row

th, P

erce

nt

3.5%

2.

3%

1.8%

2.

8%

2.7%

-0

.8%

-1

.7%

1.2

%

4.0%

4.

1%

2.8%

1.7

%

Met

ro L

abor

For

ce a

nd

Une

mpl

oym

ent R

ate

OK

C U

nem

ploy

ed

25,16

5

23,3

79

23,5

81

21,14

7

35,3

54

37,17

8

32,0

60

29,7

44

31,0

26

25,2

36

26,2

38

25,6

74

Ann

ual G

row

th, P

erce

nt

-3.4

%

-7.1%

0.

9%

-10.

3%

67.2

%

5.2%

-1

3.8%

-7

.2%

4.

3%

-18.

7%

4.0%

-2

.1%

OK

C E

mpl

oyed

54

9,44

5

546,

542

53

9,82

7

541,9

73

534,

343

53

9,13

7

550,

636

56

1,109

57

4,16

1 58

5,33

2

588,

386

59

3,41

1

Ann

ual G

row

th, P

erce

nt

1.2%

-0

.5%

-1

.2%

0.

4%

-1.4

%

0.9%

2.

1%

1.9%

2.

3%

1.9%

0.

5%

0.9%

OK

C L

abor

For

ce

574,

610

56

9,92

1 56

3,40

8

563,

120

56

9,69

7

576,

315

58

2,69

6

590,

853

60

5,18

7

610,

568

61

4,97

4

619,

228

Ann

ual G

row

th, P

erce

nt

1.0%

-0

.8%

-1

.1%

-0.1%

1.2

%

1.2%

1.1

%

1.4%

2.

4%

0.9%

0.

7%

0.7%

OK

C U

nem

ploy

men

t Rat

e 4.

4%

4.1%

4.

2%

3.8%

6.

2%

6.5%

5.

5%

5.0%

5.

1%

4.1%

4.

3%

4.1%

Sour

ce: S

teve

n C

. Age

e Ec

onom

ic R

esea

rch

and

Polic

y In

stitu

te

32

Okl

ahom

a C

ity

Popu

lati

on, E

arn

ings

, and

Inco

me

Var

iabl

e /

Year

20

06

2007

20

08

2009

20

10

2011

2012

20

13

2014

20

15

2016

Pers

onal

Inco

me

(tho

usan

ds)

44,15

1,930

45

,185,

011

49,6

54,8

41

46,0

79,2

50

48,12

7,82

9 53

,192,

511

56,8

81,8

71

58,4

35,4

70

60,7

47,7

01

62,2

38,3

22

64,4

36,5

45

Ann

ual G

row

th, P

erce

nt

11.1%

2.

3%

9.9%

-7

.2%

4.

4%

10.5

%

6.9%

2.

7%

4.0%

2.

5%

3.5%

Popu

latio

n 1,1

82,6

68

1,199

,665

1,2

16,6

45

1,237

,780

1,2

57,8

83

1,276

,416

1,2

97,3

97

1,319

,677

1,3

41,8

15

1,364

,546

1,3

91,2

20

Ann

ual G

row

th, P

erce

nt

1.8%

1.4

%

1.4%

1.7

%

1.6%

1.5

%

1.6%

1.7

%

1.7%

1.7

%

2.0%

Per C

apit

a Pe

rson

al In

com

e 37

,332

37

,665

40

,813

37

,227

38

,261

41

,673

43

,843

44

,280

44

,899

45

,611

46,3

17

Ann

ual G

row

th, P

erce

nt

9.1%

0.

9%

8.4%

-8

.8%

2.

8%

8.9%

5.

2%

1.0%

1.4

%

1.6%

1.5

%

Ann

ual W

eekl

y Ea

rnin

gs, P

riva

te S

ecto

r $6

65.8

7 $6

51.0

1 $6

36.2

7 $6

84.4

7 $7

05.6

8 $7

78.9

7 $7

68.8

5 $7

61.5

4 $7

65.5

0 $7

79.2

5

Ann

ual G

row

th, P

erce

nt

-2.2

%

-2.3

%

7.6%

3.

1%

10.4

%

-1.3

%

-1.0

%

0.5%

1.8

%

Sour

ce: S

teve

n C

. Age

e Ec

onom

ic R

esea

rch

and

Polic

y In

stitu

te


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Economic Forecast 2015 FINAL · 2016. 6. 3. · 4 2015 ECONOMIC FORECAST MAPS 3, a 10-year, $777 million construction program funding eight community projects, has experienced incredible